The Business Environment - Peter and Josephine - Essay Example

? Business Law Introduction The business environment is characterized by numerous agreements between businesses and individuals. These agreements can be either written documents or pure verbal promises. Regardless of the approach, if one party agrees to provide something to another party in exchange of money that is already a contract. In definition, a contract refers to an agreement between two or more parties with the intentions to create legal obligations between the involved parties and to be legally enforceable. The key aspects of a legal contract are that the involved parties must have had contractual capacity; must agree to terms and conditions provided on the contract; must agree that the contract is legally enforceable and not just for social or moral obligations. Finally, the contract should not be objectionable through impossibility, illegality or because it is against public policies (Young 2009, p.10). Discussion (a)In responding to case of Peter and Josephine, the paper will explore more on written contracts in order to determine whether their contract was valid. Having written contracts is much safer than verbal contracts. A written contract offers more certainty and at the same time reduces business risks by making the clarity on the agreement from the start of the engagement. Written contracts act as proof of what was agreed on by the involved parties, which acts as security of any disputes. This form of contract is also essential since it provides details on payments, timeframes, and ways on how to solve arising disputes. The other notable thing regarding written contracts is the provision of how they can be varied and conditions under which the contract can be terminated (Charman 2013, p.23). Looking into Peter and Josephine case, one can point out that there were attempts by the two to make a verbal contract, but due to the underlying circumstances, the verbal contract was never reached. This is evident from the fact that, after Peter made up his mind that he would purchase the painting, he could not reach Josephine via to reach an agreement that he will be going for the painting. Instead, Peter left a phone message and also sent a letter to Josephine, but Josephine sold the painting before listening to the phone message or reading the letter. Therefore, this implies that the two never made any agreement that Peter would buy the painting, which makes it clear that Peter did not have a valid contract. (b) A brief overview on what the common law says about the exemption clause will be helpful in understanding Peter and Larry case. One general feature of written contracts is the fact that the party issuing the contract seeks to minimize its liability under the contract either wholly or partially. Exemption clauses can claim to reduce what would be the defendant’s duty they can claim to restrict the liability, which would otherwise translate to a breach of contract or claim to exclude the party in default fully to cover the other party. In most cases, exemption clauses are applied by stronger parties against weaker parties (Taylor & Taylor 2007, p.57). In the case of Peter and Larry, Peter issues Larry with a ticket that has an exemption clause at the back. The clause states “all items left in the cloakroom are at the owner’s risk. We do not accept liability for any loss or damage of items however, caused”. Despite the fact that the same message placed at the back of the cloakroom was obscured, it was Larry’s responsibility to read and understand the exemption clause at the back of the ticket. Since the clause exempts Peter from being responsible for the loss of Larry’s coat, Peter should utilize it in defending himself against compensating Larry for his loss. In Parker v South Eastern Railway (1877) 2 CPD 416 case, the plaintiff left his bag in the cloak-room at the railway station. The plaintiff was issued with ticket that was written “see back”. On the back side there were several clauses including one that stated “the company will not be responsible for any package exceeding the value of $10.” After presenting the ticket on the same day, the plaintiff could not find the bag and claimed that the bag was worth $24. The company informed the plaintiff about the limitation clause in its defense. In the court of appeal, it was stated that, if the plaintiff knew about the limitation clause and was aware that the clause had conditions, then he was bound by the conditions. Secondly, the court stated that if the plaintiff was aware about the writing on the ticket, but did not believe that the writing had conditions, nevertheless he was bound by the condition (Charman 2013, p29). (c)The case of Peter and Agatha and that of Peter and Betta builders are clear examples of situations where verbal contracts were issued. In the first case scenario, Peter and Agatha had made verbal agreements that they would share the lottery winnings after hitting the jackpot. Agatha’s contribution towards the lottery is an indication of her commitment to their agreement. Despite the fact that Agatha failed to give her contribution during the week that Peter won the lottery does not mean that Agatha should not receive her share. This is because there was a binding verbal agreement between the two and Peter should be open to discuss with Agatha about the contributions she failed to give the week Peter won the lottery. In the case of Peter and Betta builders, the builders agreed to take the payment at the end of September. This agreement binds Peter and Betta builders, which implies that the builders are not entitled to immediate payment before the end of September. In Drew Thomas v Ronald Thomas, Elaine Thomas and Thomas Motors case, the oral agreement was that Drew would inherit Thomas Motors from his father Ronal. For this to happen, Drew was required to quit his job as a sales manager in another car dealership and join his father’s company at a lesser salary since he would inherit the company. However, Drew’s father breached the oral contract, which forced Drew to file a case against his father and company. In making the ruling, the court pointed out that existing evidence showed that parties involved had an employment agreement due to the fact that Drew received salary from his father’s company. For this reason, the court found it unlawful for Thomas Company to change the employment agreement and added that the agreement that the plaintiff would inherit the company should stand (Young 2009, p33). References List Charman, M. (2013). Contract Law, London, Routledge. pp 20-40 Taylor, D. & Taylor, R. (2007). Contract Law Directions, Oxford, Oxford University Press. pp 55-60. Young, M. (2009). Understanding Contract Law, London, Routledge. pp10-35 Read More